Afghanistan is a landlocked nation of 30 million people in southern Asia, north and west of Pakistan and east of Iran.

Afghanistan's terrain is about 75% mountains. The Hindu Kush mountains, considered an extension of the Himalayas, generally run northeast to southwest and divide the northern provinces from the rest of the country, with plains in the north and southwest. The highest peaks are in the northern Vakhan (Wakhan Corridor). 49% of the country is over 2,000 m (6,650 feet) in altitude.

deforestation (much of the remaining forests are being cut down for fuel and building materials);

desertification; and,

air and water pollution.

It is susceptible to damaging earthquakes which occur in Hindu Kush mountains, flooding and droughts.

Ahmad Shah Durrani unified the Pashtun tribes and founded Afghanistan in 1747. The country served as a buffer between the British and Russian Empires until it won independence from notional British control in 1919.

A brief experiment in democracy ended in a 1973 coup and a 1978 Communist counter-coup. The Soviet Union invaded in 1979 to support the tottering Afghan Communist regime, touching off a long and destructive war. The USSR withdrew in 1989 under relentless pressure by internationally supported anti-Communist mujahedin rebels.

A series of subsequent civil wars saw Kabul finally fall in 1996 to the Taliban, a hardline Pakistani-sponsored movement that emerged in 1994 to end the country's civil war and anarchy.

Following the 11 September 2001 terrorist attacks in New York City and Washington, D.C., a US, Allied, and anti-Taliban Northern Alliance military action toppled the Taliban for sheltering Osama Bin Ladin. The UN-sponsored Bonn Conference in 2001 established a process for political reconstruction that included the adoption of a new constitution, a presidential election in 2004, and National Assembly elections in 2005.

In December 2004, Hamid Kaarzai became the first democratically elected president of Afghanistan and the National Assembly was inaugurated the following December. Karzai was re-elected in August 2009 for a second term.

Despite gains toward building a stable central government, a resurgent Taliban and continuing provincial instability - particularly in the south and the east - remain serious challenges for the Afghan Government.

People and Society

Afghanistan's ethnically and linguistically mixed population reflects its location astride historic trade and invasion routes leading from Central Asia into South and Southwest Asia. While population data is somewhat unreliable for Afghanistan, Pashtuns make up the largest ethnic group at 42% of the population, followed by Tajiks (27%), Hazaras (9%), Uzbek (9%), Aimaq, Turkmen, Baluch, and other small groups. Dari (Afghan Farsi) and Pashto are official languages. Dari is spoken by more than one-third of the population as a first language and serves as a lingua franca for most Afghans, though Pashto is spoken throughout the Pashtun areas of eastern and southern Afghanistan. Tajik and Turkic languages are spoken widely in the north. Smaller groups throughout the country also speak more than 70 other languages and numerous dialects.

Band-e-Amir in Bamyan Province is Afghanistan's first national park; it consists of six spectacular turquoise lakes separated by natural dams of travertine.

View of the shell of the "Large Buddha" and surrounding caves in Bamyan. The Buddha statue in this cave as well as in another - both dating to the sixth century A.D. - were frequently visited and described over the centuries by travelers on the Silk Road. Both statues were destroyed by the Taliban in 2001.

A view of the Haji Abdul Rahman Mosque in Kabul, which is the largest in Afghanistan (2010). Source: US Embassy Kabul.

View from Shahr-i-Zohok (the "Red City") in Bamyan Province. Once a citadel housing about 3,000 people, it was destroyed by the Mongols in the 13th century. The invaders also leveled the nearby city that the fortress had protected and massacred all its inhabitants (possibly 150,000) and animals. In memory, the site is today known as Shahr-i-Gholghola (the "City of Screams").

Clothing, jewelry, sculptures, and handicrafts on display at a bazaar in Kabul.

An aerial view shows a traditional Afghanistan mud and straw qalat in Paktia province, Feb. 7, 2009. The fortresses can take years to finish, but can last hundreds of years, and are passed down from generation to generation. Large, extended families make each qalat home. DoD photo by Fred W. Baker III

Health: Afghanistan has one of the highest mortality rates in the world: one in five children dies before the age of five and one out of every eight Afghan women die from causes related to pregnancy and childbirth each year.

Life expectancy is about 49 years for both men and women. While these statistics are tragic, there has been progress. Recent reports indicate that 85% of the population has access to basic health services within 1 hour of travel to a health facility (68% for those on foot)--up from 9% in 2002.

More than 1,650 professional midwives are employed by the ministry of public health, providing health care and childbirth services across Afghanistan. This has helped reduce infant mortality rates, and child mortality has also fallen since 2002.

The U.S. through various agencies and in conjunction with the Afghan Government has implemented health programs to help meet the immediate health care needs of the population by strengthening the health care service delivery system; addressing the management leadership and stewardship capacity of the Afghan health care system at the central, provincial, district, and community levels; and increasing demand for and access to quality health products and services through the private sector--60% of the population receive health care from the private sector.

Education: Afghanistan has made impressive advances in increasing basic education. More than 10,000 schools are providing education services to over 7 million children, a more than six-fold enrollment growth since 2001. During the Taliban regime no girls were registered in schools. Today, 37% of the student population is girls. Similarly, the number of teachers has increased seven-fold to 142,500, of whom nearly 40,000 are women.

Adult literacy activities increased rapidly in 2009. Learning centers grew from 1,100 to 6,865, and activities expanded from 9 to 20 provinces, bringing literacy and financial services to over 169,000 beneficiaries (62% female). Ongoing support of literacy and basic education is paramount, as well as the quality and preparation of teachers in order to close the literacy gap left by 30 years of conflict. University enrollment has grown to 62,000.

Urbanization: 23% of total population (2010) growing at an annual rate of change of4.7% (2010-15 est.)

Refugees and Internally Displaced People
Afghanistan has had the largest refugee repatriation in the world in the last 30 years. Over 5 million Afghan refugees have returned to the country since 2002, with 4.4 million receiving repatriation assistance from the United Nations High Commissioner for Refugees (UNHCR). The Ministry of Refugees and Repatriation (MORR) leads the Government of the Islamic Republic of Afghanistan in assisting its citizens in returning from exile. The UNHCR leads the international community's response, in coordination with the International Organization of Migration (IOM), United Nations Children's Fund (UNICEF), the World Food Program (WFP), the World Health Organization (WHO), and a number of other national and international NGOs and donors.

In February 2009, UNHCR reported 235,833 internally displaced people (IDPs) in the country. The United States channels a significant amount of aid to refugees, returnees, IDPs, and other vulnerable conflict victims through agencies such as UNHCR, the international Committee of the Red Cross (ICRC), the World Food Program, and numerous non-governmental organizations. The U.S. also supports various organizations in providing assistance and protection to the 3.6 million Afghan refugees residing outside Afghanistan. While anchoring returnees in Afghanistan will remain a priority for U.S. assistance programs, the U.S. will also continue to support refugee assistance and protection inside countries of asylum. Since September 2001, the United States has contributed over $718 million to these programs.

History

Afghanistan, often called the crossroads of Central Asia, has had a turbulent history. In 328 BC, Alexander the Great entered the territory of present-day Afghanistan, then part of the Persian Empire, and established a Hellenistic state in Bactria (present-day Balkh). Invasions by the Scythians, White Huns, and Turks followed in succeeding centuries. In AD 642, Arabs invaded the entire region and introduced Islam.

Arab rule gave way to the Persians, who controlled the area until conquered by the Turkic Ghaznavids in 998. Following Mahmud's short-lived dynasty, various princes attempted to rule sections of the country until the destructive Mongol invasion of 1219 led by Genghis Khan.

Following Genghis Khan's death in 1227, a succession of petty chiefs and princes struggled for supremacy until late in the 14th century, when one of his descendants, Tamerlane, incorporated Afghanistan into his own vast Asian empire.

In 1747, Ahmad Shah Durrani, the founder of what is known today as Afghanistan, established his rule. A Pashtun, Durrani was elected king by a tribal council after the assassination of the Persian ruler Nadir Shah at Khabushan in the same year. Throughout his reign, Durrani consolidated chieftainships, petty principalities, and fragmented provinces into one country. His rule extended from Mashad in the west to Kashmir and Delhi in the east, and from the Amu Darya (Oxus) River in the north to the Arabian Sea in the south.

European Influence
During the 19th century, collision between the expanding British Empire in the subcontinent and czarist Russia significantly influenced Afghanistan in what was termed "The Great Game." British concern over Russian advances in Central Asia and growing influence in Persia precipitated two Anglo-Afghan wars in 1839 and again in 1878. The first resulted in the destruction of a British army. The latter conflict brought Amir Abdur Rahman to the Afghan throne. During his reign (1880-1901), the British and Russians officially established the boundaries of what would become modern Afghanistan through the demarcation of the Durand Line. The British retained effective control over Kabul's foreign affairs.

Habibullah, Abdur Rahman's son and successor, was assassinated in 1919. His third son, Amanullah, regained control of Afghanistan's foreign policy after launching the third Anglo-Afghan war with an attack on India in the same year. During the ensuing conflict, the war-weary British relinquished their control over Afghan foreign affairs by signing the Treaty of Rawalpindi in August 1919. In commemoration of this event, Afghans celebrate August 19 as their Independence Day.

Reform and Reaction
King Amanullah (1919-29) moved to end his country's traditional isolation. He established diplomatic relations with most major countries and introduced several reforms intended to modernize Afghanistan. Some of these, such as the abolition of the traditional Muslim veil for women and the opening of a number of co-educational schools, quickly alienated many tribal and religious leaders. Faced with overwhelming armed opposition, Amanullah was forced to abdicate in January 1929 after Kabul fell to forces led by Bacha-i-Saqao, a Tajik brigand. Prince Nadir Khan, a cousin of Amanullah's, in turn defeated Bacha-i-Saqao in October of the same year and, with considerable Pashtun tribal support, was declared King Nadir Shah. Four years later, however, he was assassinated in a revenge killing by a Kabul student.

Mohammad Zahir Shah, Nadir Khan's 19-year-old son, succeeded to the throne and reigned from 1933 to 1973. In 1964, King Zahir Shah promulgated a liberal constitution providing for a two-chamber legislature to which the king appointed one-third of the deputies. Although Zahir's "experiment in democracy" produced few lasting reforms, it permitted the growth of unofficial extremist parties on both the left and the right. These included the communist People's Democratic Party of Afghanistan (PDPA), which had close ideological ties to the Soviet Union. In 1967, the PDPA split into two major rival factions: the Khalq (Masses) faction headed by Nur Muhammad Taraki and Hafizullah Amin and supported by elements within the military, and the Parcham (Banner) faction led by Babrak Karmal. The split reflected ethnic, class, and ideological divisions within Afghan society.

Zahir's cousin, Sardar Mohammad Daoud, served as his Prime Minister from 1953 to 1963. During his tenure as Prime Minister, Daoud solicited military and economic assistance from both Washington and Moscow and introduced controversial social policies of a reformist nature. Daoud's alleged support for the creation of a Pashtun state in the Pakistan-Afghan border area heightened tensions with Pakistan and eventually resulted in Daoud's dismissal in March 1963.

Daoud's Republic (1973-78) and the April 1978 Coup
Amid charges of corruption and malfeasance against the royal family and poor economic conditions, former Prime Minister Daoud seized power in a military coup on July 17, 1973. Zahir Shah fled the country, eventually finding refuge in Italy. Daoud abolished the monarchy, abrogated the 1964 constitution, and declared Afghanistan a republic with himself as its first President and Prime Minister. His attempts to carry out badly needed economic and social reforms met with little success, and the new constitution promulgated in February 1977 failed to quell chronic political instability.

Seeking to exploit more effectively mounting popular disaffection, the PDPA reunified with Moscow's support. On April 27, 1978, the PDPA initiated a bloody coup, which resulted in the overthrow and murder of Daoud and most of his family. Nur Muhammad Taraki, Secretary General of the PDPA, became President of the Revolutionary Council and Prime Minister of the newly established Democratic Republic of Afghanistan.

Opposition to the Marxist government emerged almost immediately. During its first 18 months of rule, the PDPA brutally imposed a Marxist-style "reform" program, which ran counter to deeply rooted Afghan traditions. In addition, thousands of members of the traditional elite, the religious establishment, and the intelligentsia were imprisoned, tortured, or murdered. Conflicts within the PDPA also surfaced early and resulted in exiles, purges, imprisonments, and executions.

By the summer of 1978, a revolt began in the Nuristan region of eastern Afghanistan and quickly spread into a countrywide insurgency. In September 1979, Hafizullah Amin, who had earlier been Prime Minister and Minister of Defense, seized power from Taraki. Over the next 2 months, instability plagued Amin's regime as he moved against perceived enemies in the PDPA. By December, party morale was crumbling, and the insurgency was growing.

The Soviet Invasion
In December 1978, Moscow signed a new bilateral treaty of friendship and cooperation with Afghanistan, and the Soviet military assistance program increased significantly. The regime's survival increasingly was dependent upon Soviet assistance as the insurgency spread and the Afghan army began to collapse.

By October 1979, however, relations between Afghanistan and the Soviet Union were tense as Hafizullah Amin refused to take Soviet advice on how to stabilize and consolidate his government. Faced with a deteriorating security situation, on December 24, 1979, large numbers of Soviet airborne forces began to land in Kabul. They killed Hafizullah Amin and installed Babrak Karmal, exiled leader of the Parcham faction, as Prime Minister.

Following the invasion, the Karmal regime, although backed by 120,000 Soviet troops, was unable to establish authority outside Kabul. As much as 80% of the countryside, including parts of Herat and Kandahar, eluded effective government control. An overwhelming majority of Afghans opposed the communist regime, either actively or passively. Afghan fighters (mujahideen) made it almost impossible for the regime to maintain a system of local government outside major urban centers. Poorly armed at first, in 1984 the mujahideen began receiving substantial assistance in the form of weapons and training from the U.S. and other outside powers.

In May 1985, the seven principal Peshawar-based guerrilla organizations formed an alliance to coordinate their political and military operations against the Soviet occupation. Late in 1985, the mujahideen were active in and around Kabul. The failure of the Soviet Union to win over a significant number of Afghan collaborators or to rebuild a viable Afghan army forced it to bear an increasing responsibility for fighting the resistance and for civilian administration.

Soviet and popular displeasure with the Karmal regime led to its demise in May 1986. Karmal was replaced by Muhammad Najibullah, former chief of the Afghan secret police (KHAD). As Prime Minister, Najibullah was ineffective and highly dependent on Soviet support. Undercut by deep-seated divisions within the PDPA, regime efforts to broaden its base of support proved futile.

The Geneva Accords and Their Aftermath
By the mid-1980s, the tenacious Afghan resistance movement was exacting a high price from the Soviets, both militarily within Afghanistan and by souring the U.S.S.R.'s relations with much of the Western and Islamic world. Informal negotiations for a Soviet withdrawal from Afghanistan had been underway since 1982. In 1988 the Geneva accords were signed, which included a timetable that ensured full Soviet withdrawal from Afghanistan by February 15, 1989. About 14,500 Soviet and an estimated one million Afghan lives were lost between 1979 and the Soviet withdrawal in 1989.

Significantly, the mujahideen were party neither to the negotiations nor to the 1988 agreement and, consequently, refused to accept the terms of the accords. As a result, the civil war continued after the Soviet withdrawal, which was completed in February 1989. Najibullah's regime was able to remain in power until 1992 but collapsed after the defection of Gen. Abdul Rashid Dostam and his Uzbek militia in March. However, when the victorious mujahideen entered Kabul to assume control over the city and the central government, a new round of internecine fighting began between the various militias. With the demise of their common enemy, the militias' ethnic, clan, religious, and personality differences surfaced, and the civil war continued.

Seeking to resolve these differences, the leaders of the Peshawar-based mujahideen groups established an interim Islamic Jihad Council in mid-April 1992 to assume power in Kabul. Moderate leader Prof. Sibghatullah Mojaddedi was to chair the council for 2 months, after which a 10-member leadership council composed of mujahideen leaders and presided over by the head of the Jamiat-i-Islami, Prof. Burhanuddin Rabbani, was to be set up for 4 months. During this 6-month period, a Loya Jirga, or grand council of Afghan elders and notables, would convene and designate an interim administration which would hold power up to a year, pending elections.

But in May 1992, Rabbani prematurely formed the leadership council, undermining Mojaddedi's fragile authority. In June, Mojaddedi surrendered power to the Leadership Council, which then elected Rabbani as President. Nonetheless, heavy fighting broke out in August 1992 in Kabul between forces loyal to President Rabbani and rival factions, particularly those who supported Gulbuddin Hekmatyar's Hezb-i-Islami. After Rabbani extended his tenure in December 1992, fighting in the capital flared up in January and February 1993. The Islamabad Accord, signed in March 1993, which appointed Hekmatyar as Prime Minister, failed to have a lasting effect. A follow-up agreement, the Jalalabad Accord, called for the militias to be disarmed but was never fully implemented. Through 1993, Hekmatyar's Hezb-i-Islami forces, allied with the Shi'a Hezb-i-Wahdat militia, clashed intermittently with Rabbani and Masood's Jamiat forces. Cooperating with Jamiat were militants of Sayyaf's Ittehad-i-Islami and, periodically, troops loyal to ethnic Uzbek strongman Abdul Rashid Dostam. On January 1, 1994, Dostam switched sides, precipitating large-scale fighting in Kabul and in northern provinces, which caused thousands of civilian casualties in Kabul and elsewhere and created a new wave of displaced persons and refugees. The country sank even further into anarchy, forces loyal to Rabbani and Masood, both ethnic Tajiks, controlled Kabul and much of the northeast, while local warlords exerted power over the rest of the country.

Rise and Fall of the Taliban
The Taliban had risen to power in the mid-1990s in reaction to the anarchy and warlordism that arose after the withdrawal of Soviet forces. Many Taliban had been educated in madrassas in Pakistan and were largely from rural southern Pashtun backgrounds. In 1994, the Taliban developed enough strength to capture the city of Kandahar from a local warlord and proceeded to expand its control throughout Afghanistan, occupying Kabul in September 1996. By the end of 1998, the Taliban occupied about 90% of the country, limiting the opposition largely to a small mostly Tajik corner in the northeast and the Panjshir valley.

The Taliban sought to impose an extreme interpretation of Islam--based upon the rural Pashtun tribal code--on the entire country and committed massive human rights violations, particularly directed against women and girls. The Taliban also committed serious atrocities against minority populations, particularly the Shi'a Hazara ethnic group, and killed noncombatants in several well-documented instances. In 2001, as part of a drive against relics of Afghanistan's pre-Islamic past, the Taliban destroyed two huge Buddha statues carved into a cliff face outside of the city of Bamiyan.

From the mid-1990s the Taliban provided sanctuary to Osama bin Laden, a Saudi national who had fought with the mujahideen resistance against the Soviets, and provided a base for his and other terrorist organizations. Bin Laden provided both financial and political support to the Taliban. Bin Laden and his al-Qaeda group were charged with the bombing of the U.S. Embassies in Nairobi and Dar Es Salaam in 1998, and in August 1998 the United States launched a cruise missile attack against bin Laden's terrorist camp in southeastern Afghanistan. Bin Laden and al-Qaeda acknowledged their responsibility for the September 11, 2001 terrorist attacks against the United States.

Following the Taliban's repeated refusal to expel bin Laden and his group and end its support for international terrorism, the U.S. and its partners in an anti-terrorist coalition began a military campaign on October 7, 2001, targeting terrorist facilities and various Taliban military and political assets within Afghanistan. Under pressure from U.S. military and anti-Taliban forces, the Taliban disintegrated rapidly, and Kabul fell on November 13, 2001.

Afghan factions opposed to the Taliban met at a United Nations-sponsored conference in Bonn, Germany in December 2001 and agreed to restore stability and governance to Afghanistan--creating an interim government and establishing a process to move toward a permanent government. Under the "Bonn Agreement," an Afghan Interim Authority was formed and took office in Kabul on December 22, 2001 with Hamid Karzai as Chairman. The Interim Authority held power for approximately 6 months while preparing for a nationwide "Loya Jirga" (Grand Council) in mid-June 2002 that decided on the structure of a Transitional Authority. The Transitional Authority, headed by President Hamid Karzai, renamed the government as the Transitional Islamic State of Afghanistan (TISA). One of the TISA's primary achievements was the drafting of a constitution that was ratified by a Constitutional Loya Jirga on January 4, 2004. On December 7, 2004, the country was renamed the Islamic Republic of Afghanistan.

Government

On October 9, 2004, Afghanistan held its first national democratic presidential election. More than 8 million Afghans voted, 41% of whom were women. Hamid Karzai was announced as the official winner on November 3 and inaugurated on December 7 for a 5-year term as Afghanistan's first democratically elected president.

An election was held on September 18, 2005 for the "Wolesi Jirga" (lower house) of Afghanistan's new bicameral National Assembly and for the country's 34 provincial councils. Turnout for the election was about 53% of the 12.5 million registered voters. The Afghan constitution provides for indirect election of the National Assembly's "Meshrano Jirga" (upper house) by the provincial councils and by reserved presidential appointments. The first democratically elected National Assembly since 1969 was inaugurated on December 19, 2005. Younus Qanooni and Sigbatullah Mojadeddi were elected Speakers of the Wolesi Jirga and Meshrano Jirga, respectively.

The second national democratic presidential and provincial council elections were held in August 2009, and National Assembly elections were held September 2010. Hamid Karzai's main competitor, Abdullah Abdullah, forced a presidential run-off to be scheduled, but then withdrew. On November 2, 2009, officials of the Independent Election Commission (IEC) declared Hamid Karzai President of Afghanistan for another 5-year term. Unlike previous election cycles, the elections were coordinated by the IEC, with assistance from the UN. NATO officials announced in March 2009 that 15.6 million voters had registered to vote, roughly half of the country's population, and that 35% to 38% of registered voters were women.

Since the fall of the Taliban regime, destabilizing factors have included activities by the Taliban and other insurgents and by al-Qaeda. The government's authority is growing, although its ability to deliver necessary social services remains largely dependent on funds from the international donor community. U.S. assistance for Afghanistan's reconstruction from fiscal year 2001 to the present totals over $72 billion, including support for security services. Donors pledged continued assistance for the rebuilding of the country at the June 2008 international Afghanistan support conference in Paris. Overall, the international community has made multi-year reconstruction and security assistance pledges to Afghanistan totaling over $100 billion.

Government Type: Islamic republic

Capital: Kabul (population: 3.573 million est. 2009)

For more than 3,000 years, Kabul has occupied a strategic location along Central and Southern Asian trade routes. In the late eighteenth century, Kabul was established as Afghanistan's capital. In this false-color satellite image vegetation appears fluorescent green, urban areas range in color from gray to black, and bare ground varies in color from beige to reddish brown. A mountain range, including Kohi Asamayi and Kohi Bini Hisar, snakes through the scene, running roughly northwest-southeast. More peaks appear in the northeast, right next to an airport. Urbanization appears densest at the city's center, just southwest of the airport, and it stretches out toward the right side of the image along an east-west highway. Leaping a mountain boundary, cityscape also fills the lower-left quadrant of the image. Partly constrained by surrounding mountains, Kabul's primary direction for growth has been vertical, with multistory buildings constructed atop existing structures. Photo courtesy of NASA.

Administrative Divisions:
There are 34 provinces (welayat, singular - welayat) in Afghanistan. Each province is divided into small districts. There are approximately 364 districts although this number fluctuates. There are approximately 153 municipalities. Provincial line departments have basic service delivery responsibility in key sectors (health, education). Provincial governors are generally nominated by the Independent Directorate of Local Governance and appointed by the president.

Legal System: Afghanistan is an Islamic country. An estimated 80% of the population is Sunni, following the Hanafi school of jurisprudence; the remainder of the population--and primarily the Hazara ethnic group--is predominantly Shi'a. Despite attempts during the years of communist rule to secularize Afghan society, Islamic practices pervade all aspects of life. Islam served as a principal basis for expressing opposition to communism and the Soviet invasion. Islamic religious tradition and codes, together with traditional tribal and ethnic practices, have an important role in personal conduct and dispute settlement. Afghan society is largely based on kinship groups, which follow traditional customs and religious practices, though somewhat less so in urban areas. Mixed legal system of civil, customary, and Islamic law. Afghanistan has not submitted an International Court of Justice (ICJ) jurisdiction declaration but accepts International Criminal Court (ICCt) jurisdiction

Water

Access to improved sources of drinking water: 48% of population (2008)

Access to improved sanitation facilities: 37% of population (2008)

Agriculture

An estimated 79% of Afghans are dependent on agriculture and related agribusinesses for their livelihoods. Opium poppy production and the opium trade continue to have a significant monetary share of the country’s agricultural economy. Licit commercial agriculture is playing a significant role in increasing the income of rural populations. The major food crops produced are: corn, rice, barley, wheat, vegetables, fruits, and nuts. The major industrial crops are: cotton, tobacco, madder, castor beans, and sugar beets. Agricultural production is constrained by an almost total dependence on erratic winter snows and spring rains for water; irrigation is primitive. Relatively little use is made of machines, chemical fertilizer, or pesticides.

Afghan farmers need financing to buy quality seeds, fertilizer, and equipment. The United States and the international community are helping to restore banking and credit services to rural lenders, which now administer loans in nearly two-thirds of the country’s provinces. As of September 2009, more than 52,300 agricultural loans ranging from approximately $200 to $2 million had gone to small businesses, with a repayment rate of 94%. Of these, 49% of loans had gone to women-owned businesses, and 27,700 borrowers were women. The program’s success has encouraged commercial banks to extend revolving loans for agribusinesses. Funds have been provided for leases and to promote agro-processing and support for crop exports.

Resources

Afghanistan is endowed with natural resources, including extensive deposits of natural gas, petroleum, coal, copper, silver, gold, cobalt, chromite, talc, barites, sulfur, lead, zinc, iron ore, salt, rare earth elements, and precious and semiprecious stones. Unfortunately, ongoing instability in certain areas of the country, remote and rugged terrain, and an inadequate infrastructure and transportation network have made mining these resources difficult, and there have been few serious attempts to further explore or exploit them. The first significant investment in the mining sector is expected to commence soon, with the development of the Aynak copper deposit in east-central Afghanistan. This project tender, awarded to a Chinese firm and valued at over $2.5 billion, is the largest international investment in Afghanistan to date. The Ministry of Mines also plans to move forward with additional tenders in 2012.

The most important resource has been natural gas, first tapped in 1967. At their peak during the 1980s, natural gas sales accounted for $300 million a year in export revenues (56% of the total). Ninety percent of these exports went to the Soviet Union to pay for imports and debts. However, during the withdrawal of Soviet troops in 1989, Afghanistan's natural gas fields were capped to prevent sabotage by the mujahideen. Restoration of gas production has been hampered by internal strife and the disruption of traditional trading relationships following the collapse of the Soviet Union. In addition, efforts are underway to create Reconstruction Opportunity Zones (ROZs). ROZs stimulate badly needed jobs in underdeveloped areas where extremists lure fighting-age young men into illicit and destabilizing activities. ROZs encourage investment by allowing duty-free access to the U.S. for certain goods produced in Afghanistan.

Energy/Electric Power

For nearly 3 decades, the availability of secure energy supplies in Afghanistan was significantly disrupted by conflict. Much of the country's power generation, transmission, and distribution infrastructure was destroyed, and what remained was stretched far beyond capacity. More than 90% of the population had no access to electricity. In January 2009, with the help of the Asian Development Bank and the Indian Government, electricity began to flow into Kabul along a newly constructed transmission line running from neighboring Uzbekistan. For the first time in more than a generation, the majority of the capital's 4 million people enjoy the benefits of power. In 2001, Afghanistan produced 430 megawatts of electricity. As of 2009, the installed generation capacity had grown to 1,028 megawatts. International statistics maintained by the World Bank indicate the ratio of gross domestic product (GDP) growth to electrical production is approximately $1,000 to 300 kWh.

The United States has provided considerable assistance to help develop new electricity generation capacity and provide 24-hour power in key cities including Kabul, Lashkar Gah, and Kandahar. Major projects carried out include refurbishment of power generation capacity at Kajaki Dam in the south and opening the Kabul power plant. Under the U.S. and partners’ supervision, the Afghan Government has transferred all assets, liabilities, and personnel from the troubled, state-run power utility Da Afghanistan Breshna Mosesa (DABM) to the new corporatized national electricity utility Da Afghanistan Breshna Sherkat (DABS). The move was a significant breakthrough in Afghan Government and donor efforts to modernize and begin to commercialize the national electricity sector.

Reliable, affordable electricity is vitally important to Afghan economic growth, prosperity, and stability. The energy infrastructure continues to be a priority for the U.S. and other donor nations.

Economy

In the 1930s, Afghanistan embarked on a modest economic development program. The government founded banks; introduced paper money; established a university; expanded primary, secondary, and technical schools; and sent students abroad for education. Historically, there has been a dearth of information and reliable statistics about Afghanistan's economy.

The 1979 Soviet invasion and ensuing civil war destroyed much of the country's limited infrastructure and disrupted normal patterns of economic activity. Gross domestic product fell substantially because of loss of labor and capital and disruption of trade and transport.

Continuing internal strife hampered both domestic efforts at reconstruction as well as international aid efforts. However, Afghanistan's economy has grown at a fast pace since the 2001 fall of the Taliban, albeit from a low base. GDP growth exceeded 12% in 2007 and 3.4% in 2008; growth for 2009-2010 was 20.9% and was approximately 8.2% in 2010.

Despite these increases, unemployment remains around 35% and factors such as corruption, security, and shortage of skilled workers constrains development and the conduct of business.

In June 2006, Afghanistan and the International Monetary Fund (IMF) agreed on a Poverty Reduction and Growth Facility program for 2006-2009 that focused on maintaining macroeconomic stability, boosting growth, and reducing poverty. The IMF suspended credit programs in Afghanistan following the collapse and discovery of widespread fraud at the country’s largest bank, Kabul Bank. Following regulatory action by the Government of Afghanistan to address the banking crisis, the IMF approved a new extended credit facility in November 2011. The new $133 million program is designed to enable progress toward a stable and sustainable macroeconomic position, assist in the management of the economic impact of withdrawal of international forces, and address governance and accountability issues.

Afghanistan's economy is recovering from decades of conflict. The economy has improved significantly since the fall of the Taliban regime in 2001 largely because of the infusion of international assistance, the recovery of the agricultural sector, and service sector growth.

Despite the progress of the past few years, Afghanistan is extremely poor, landlocked, and highly dependent on foreign aid, agriculture, and trade with neighboring countries. Much of the population continues to suffer from shortages of housing, clean water, electricity, medical care, and jobs.

Criminality, insecurity, weak governance, and the Afghan Government's inability to extend rule of law to all parts of the country pose challenges to future economic growth.

Afghanistan's living standards are among the lowest in the world.

While the international community remains committed to Afghanistan's development, pledging over $67 billion at four donors' conferences since 2002, the Government of Afghanistan will need to overcome a number of challenges, including low revenue collection, anemic job creation, high levels of corruption, weak government capacity, and poor public infrastructure.

Hues of green and orange highlight the extreme ruggedness of the mountainous terrain shown in this false-color satellite image of eastern Afghanistan, near its border with Pakistan. The dark green areas on the right side along rivers indicate agricultural areas. Snow-fed streams allow sufficient irrigation to transform relatively arid soils into productive fields. Image courtesy of USGS.